What we’re reading (11/1)
“G-20 Needs A ‘Sputnik Moment’ On The Global Economy” (Mohamed El-Erian, Washington Post). “central banks must now confront two policy requirements that would have been much easier to handle with better sequencing over a longer period: easing off the accelerator by reducing large-scale asset purchases (a QE taper) and tapping on the brakes through interest rate increases. The Bank of England has been the best at recognizing the underlying inflation dynamics and the urgent need to adjust its forward policy guidance. The Fed continues to notably lag behind, while the European Central Bank’s own sluggishness has a better economic rationale.”
“Even After A Weak Patch, America’s Economy Is Still In High Gear” (The Economist). “An end to stimulus would usually augur poorly for growth. Yet other factors could insulate the economy. The consumption of goods is about 15% higher than its trend level, partly because people have spent much less money than usual on holidays and restaurants and much more on sofas, exercise bikes and stay-at-home essentials. But with the pandemic now apparently petering out, people are buying experiences again—a fillip for growth, given that services account for nearly 80% of output[.]”
“How Robinhood Cashes In On The Options Boom” (Wall Street Journal). “In the 12 months through June, the 11 largest U.S. retail brokerages collected $2.2 billion for selling customers’ options orders, according to Larry Tabb, head of market-structure research at Bloomberg Intelligence. That was about 60% higher than their take from selling equities orders. During that period, major brokers were paid an average of about 16 cents for each 100 shares of their customers’ stock orders, compared with about 54 cents for equivalent-sized options orders, Mr. Tabb’s data show.”
“Jobs People Want — And Don't Want — After The Pandemic” (Axios). “Interest in IT and media jobs is surging, but no one wants to fill the sorely needed child care and home health roles…only around 37% of U.S. jobs can be done from home, per an analysis by economists at the University of Chicago. But more and more people are eager to secure those jobs for the flexibility they provide during the pandemic and beyond, says Indeed economist AnnElizabeth Konkel…Indeed's report shows that interest in loading and stocking jobs at warehouses has cratered 40%. Clicks for food service jobs are down 18%. And interest in personal care and home health jobs and child care jobs is down 33% and 15%, respectively.”
“Catastrophe Bonds Storm Into Mainstream As Climate Threat Grows” (Financial Times). “A cyclone that sweeps through Jamaica, a typhoon that hits China’s Greater Bay, an earthquake that damages Google’s facilities in California — just a few examples of the growing range of hypothetical events that investors are queueing up to underwrite. Catastrophe bonds were first created in the 1990s as a niche form of risk transfer from insurers to investors. They have expanded steadily to a market of more than $30bn in terms of debt outstanding.”
